'We are witnessing political warfare': Micronesia leader drops China bombshell

The outgoing president of the Federated States of Micronesia (FSM) David Panuelo has claimed he is facing "direct threats" to his life for resisting China's diplomatic tactics and has proposed cutting ties with Beijing in favour of Taiwan.

Panuelo wrote an explosive missive addressed to the FSM Congress and senior leadership, on the heels of his election defeat on March 7, warning them of China's antics; including claims of bribing FSM government figures to undermine the island nation's sovereignty.

His letter was leaked in the public domain on the same day Xi Jinping, consolidated his power, as he was elected President unopposed for a record third-term.

However, a Chinese diplomat has called the letter slanderous, a misrepresentation of facts, and revealed a broken commitment to the one-China policy.

A Pacific political scientist says while the move from Panuelo was "significant" the timing of the letter could be "dismissed" as the views of a leader who was bitter after an election defeat.

Deliberate interference

In the briefing, Panuelo blasted Chinese officials for carrying out clandestine intelligence operations, interfering in government affairs, and compromising national security, to further its own mandate.

He claimed that these efforts from Beijing are deliberate and intended to push his country away from its traditional Western allies - the US, Australia and Japan.

"I have had direct threats against my personal safety from PRC [China] officials acting in an official capacity," Panuelo said, claiming that speaking out against China's tactics has come at a risk to him and his family.

He alleged that Beijing's new Pacific envoy Qian Bo authorised state agents to follow him during the Pacific Islands Forum Special Leaders Meeting last month.

"You can imagine my further surprise when it was determined that they worked for the Chinese Embassy in Suva. It was then discovered that one of them was a [People's Liberation Army] intelligence officer," he said.

"The same Ambassador [Qian Bo] who relentlessly shouts that the PRC does not interfere in the governance of other countries was himself actively trying to interfere in our country's governance...to accomplish his mandate beneficial to the PRC but to the FSM.

"Simply put, we are witnessing political warfare in our country.

"We are witnessing Grey Zone (deceptive) activity in our country. Over the course of my administration, the scope has increased, as has the depth, as has the gravity."

RNZ Pacific has contacted the Chinese foreign ministry to respond to these allegations.

Claims of envelopes full of money

China has bribed members of his administration "to be complicit" and "silent", Panuelo said, accusing its diplomats of handing out envelopes "filled with money" to senior FSM officials "as a means to curry favour."

He has laid out the plans for his country to switch relations from Beijing to Taipei, following his meeting with Taiwan's Foreign Minister Joseph Wu in February.

He said he has invited a team from Taiwan's International Development Cooperation Fund (ICDF) on a fact finding mission this month to identify areas in which Taiwan could provide assistance across sectors including; agriculture, health, employment and education, and civil aviation.

"We project we need an injection of approximately $US50 million to meet out future needs." he said.

"We can, and will receive this, over a three-year period, if and when we establish diplomatic relations with Taiwan."

Additionally, FSM is expected to receive an annual $US15 million package that the northern Pacific nation would have the flexibility to utilise to its liking, including pumping the money to directly assist with the needs of its four States.

Panuelo said the assistance "would have immediate and long-term impacts on State Governments' capacity to implement programming for their residents".

"Additionally, Taiwan assures me that they will simply 'pick up' any and all projects that China is currently undertaking."

'We can help to prevent war'

Some of the Chinese government-funded projects include the construction of the National Convention Centre in the FSM capital Palikir, and the Pohnpei and Kosrae State Government buildings.

"All of this assistance would be on top of the greatly added layers of security and protection that come with our country distancing itself from the PRC, which has demonstrated a keen capability to undermine our sovereignty, rejects our values, and uses our elected and senior officials for their own purposes," Panuelo said.

"We can play an essential role in preventing war in our region; we can save the lives of our own Micronesian citizens; we can strengthen our sovereignty and independence; and we can do it while having our country at large benefit financially."

He added that he has taken the decision to write the letter despite "risks to my personal safety; the safety of my family; and the safety of all the staff that I rely on to support me in this work" for "the sovereignty, peace and stability" of the FSM.

China excuse for election loss

But University of Hawai'i at Moana associate professor Tarcisius Kabutaulaka said Beijing will deny all allegations of bribery.

"It [allegations] is significant, especially from the leader of a country that has diplomatic relations with PRC," he told RNZ Pacific.

"But it is unfortunate that he made the statement on the eve of his presidency and as he is leaving office. This could therefore be read and therefore dismissed as the views of someone who has just lost the election and therefore looking for someone to blame."

Dr Kabutaulaka said Micronesia is not the first country to make such allegations of statecraft and espionage against China but Beijing was not alone in using diplomatic, economic and strategic statecraft to influence other nations.

"In the early 2000s, for example, Australia bugged Timor-Leste government offices in order to gain unfair advantage in negotiation on oil and gas fields in the Timor Sea and pushed the interestsof oil and gas corporates. In 2015, secret papers revealed that New Zealand was 'spying indiscriminately' on Pacific Island countries. In 2022, it was reportedthat Australia and New Zealand spy on Pacific Island countries all the time."

"The US has done similar things all over the world," he said.

But, espionage in of itself is not the same as bribery and corruption, which is what President David Panuelo claims China is doing in the FSM, Dr Kabutaulaka said.

He said there are no evidence that China bribed members of the FSM congress in the ways that outgoing President Panuelo claimed.

"But I would not be surprised if China spies and uses other means of statecraft to influence domestic politics in FSM and other Pacific Island countries. I say this because Beijing has both the capacity and wherewithal to do it.

"We have heard allegations of China doing similar things in other countries. What is different in this case is that the allegations were made by the out-going President."

China says letter as slander, reveals broken commitments

A statement by ambassador Huang Zheng, released through the Chinese Embassy in FSM, said remarks in the letter were a clear misrepresentation of facts and slander.

Huang said the letter also revealed "an individual politician" had broken political commitments to adhere by the one-China principle, which holds Taiwan to be an inalienable part of China.

"China firmly rejects any official communications between the FSM and Taiwan region in any forms and firmly opposes any slanders against Chinese diplomatic and commercial activities," Huang said.

"The FSM and China have always upheld mutual respect, equality, mutual benefit and common development."

He urged the country's politicians to remember past conquests by colonial powers and to look towards co-operation based on trust and respect for sovereignty within a changing world order.

"China is a reliable partner for developing countries, and China's development creates opportunities for the world," he said.

"China urges relevant people in the FSM to stop sending any wrong signals to the 'Taiwan independence' separatist forces and bring the bilateral relation back on the track of the one-China principle universally supported by the international community, and take concrete actions to defend the Great Friendship between our two countries."

Beijing will be concerned

He said the northern Pacific subregoin is particularly important because of the U.S. influence in the Compact of Free Association countries - Palau, FSM and Marshall Islands - and Guam and the Commonwealth of the Northern Mariana Islands.

"I expect that China would do whatever it could to maintain relations there. FSM is its only diplomatic partner in the north. If it switches to Taiwan, it will be a big deal for Beijing."

Dr Kabutaulaka said Panuelo's letter also meant that the Western allies will respond in the way that will benefit their own position.

"What we will most likely not see from Western countries is them discouraging FSM not to switch to Taiwan. In fact, I think there is support amongst Western countries for FSM to sever diplomatic ties with PRC. That will probably not be expressed publicly," he said.

He warned that Beijing will be concerned about the prospect of losing FSM because it will interpret its recognition of Taiwan as a violation of its sovereignty and the One China policy.

"But more seriously, because it had worked hard to reduce recognition of Taiwan globally an especially in the Pacific. The Solomon Islands and Kiribati switch from Taiwan to the PRC in September 2019 was a big win for Beijing."

If China loses to FSM this will be a setback, he said.

China ready to work with FSM

China's Foreign Ministry spokesperson Mao Ning responded to Panuelo's accusations on Friday.

"Taiwan is an inalienable part of China's territory," Mao told Reuters.

"The one-China principle is a universally recognised norm in international relations and the political premise and foundation on which China establishes diplomatic relations with other countries including the FSM," she said.

She said China opposed any move by countries it had diplmatic relations with engaing with Taiwan.

"On the basis of the one-China principle and in the spirit of mutual respect, equality and mutual benefit, China stands ready to work with the FSM to enhance friendship and cooperation."

RNZ has contacted Taiwan's Foreign Ministry for comment but has yet to receive a response.

Last week Daivd Panuelo lost his seat and therefore the presidency in FSM's election.